Real Estate Investor Magazine South Africa December/ January 2018/2019 | Page 14

PROPERTY DEVELOPMENTS
How the Affordable Property
Market Is Outperforming the Rest
BY GISELE KRUGER
L
ightstone,  provides analytics to evaluate trends and
segmentation within all the property sectors, and in a
recent evaluation of the total eight million South Af-
rican properties, it is revealed that the affordable sector (low
and mid value) is by far the largest portion of the residential
property market, amounting to 71,4% of the total volume of
properties in South Africa.
Lightstone’s affordable property market is defined as
properties with a Lightstone automated valuation of R
700 000 or less and a total of 94,2% of these properties are
classified as freehold.
PROPERTY STOCK SEGMENTATION WITHIN THE RESIDENTIAL MARKET
“While we find the majority of the property market is
growing at a stable rate, the affordable market is in
a dual pressure system,” explain Paul-Roux De Kock.
“On the one hand we see potential buyers moving
from the informal sector to the formal sector, and on
the other hand people are downscaling and dropping
back into the affordable market possibly because of
the shrinking economy. Potential buyers are looking
at formal markets developing around informal set-
tlements to obtain value for money and developers
12
DECEMBER 2018/JANUARY 2019 SA Real Estate Investor Magazine
are filling the gap and meeting the demand. “What
we find so interesting about the affordable market is
that parts of this segment grow so rapidly that it could
quickly be reclassified into a middle or high-end value
segment.”  
The total value of the affordable market is R1,143
billion whereas the South African residential property
market is valued at R5.3 trillion. 32,1% of the afford-
able market properties are situated in Gauteng, 13,8%
in the Western Cape and 13,2% in Kwazulu-Natal.